Financial experts, including Mr. Okechukwu Unegbu, have urged the federal government to use the 2021 budget to address fundamental economic dislocations in order to hasten the country’s exit from recession.
Unegbu, a former managing director of the defunct Citizens International Bank, for his part, made the call in an interview recently in Abuja.
He said that effective policies that would propel basic economic consideration into positive growth would go a long way to move the economy out of recession.
“Education, for instance, is a key factor of production, but 5.6 per cent allocation to education in the budget looks a bit inadequate.
“The budget should address fundamental dislocations in the country, like boosting investment, reducing high unemployment rate and cutting down on inflation,’’ he said.
Unegbu said that it would also be advisable for government to reduce the tax rate so as to increase the volume of tax to enhance economic growth.
“The more employment you get, the more tax you will get, and that will boost government’s revenue drive.
“Government should lower the tax rate for more investment and a wider tax volume. The apex bank should be more proactive and more open in its foreign exchange operations. The idea of direct allocation of foreign exchange to certain categories of businessmen, instead of allowing them to go through deposit money banks, is an abuse of the naira,’’ he said.
Unegbu advised the apex bank to control the naira by pegging its value against major world currencies.
“Partial floating of the naira is also advisable, to make it changeable anywhere in the world,’’ he said.
Two other pundits, who pleaded anonymity told NATIONAL ECONOMY that the Central Bank of Nigeria should adopt effective monetary policies that would strengthen the value of the naira.
They said that a strong naira is indicative of a performing economy, stressing that the CBN should take innovative steps to firm up the value of the naira.